Oceanic Niño Index

Histograms identify October of moderate La Niña's

The tropical Pacific Ocean goes through natural warming (El Niño) and
cooling (La Niña) cycles. Last winter was categorized as a 'very strong'
El Niño comparable to those of 1972/73, 1982/83 and 1997/98. Subsequent
years see moderate La Niña's. This year is experiencing such a cooling
trend.

Natural gas futures contracts have a limited trading history, dating back
to 1995. When we view the relationship between them and the La Niña
Years we find a correlation. Natural gas tends to be strong for seven to ten
weeks in September/October and rollover in November (2010 initially peaked
at 7 and then extended to 13 weeks). The current rally has finished its
ninth week. The weekly RSI(14) normally topped in the 60's. It is now 68. Watch
for a high soon and then a downside break of 20% or more.

Once a break of six or more weeks has run its course, we could look forward
to the possibility of a rally lasting into the summer of 2017.

2016

October Tops

1998/99

1999/2000

2007/2008

2010/2011

Energy stocks that can be monitored for purchases on a deep correction:

The opinions in this report are solely those of the author.
The information herein was obtained from various sources; however we do not
guarantee its accuracy or completeness. This research report is prepared for
general circulation and is circulated for general information only. It does
not have regard to the specific investment objectives, financial situation
and the particular needs of any specific person who may receive this report.
Investors should seek financial advice regarding the appropriateness of investing
in any securities or investment strategies discussed or recommended in this
report and should understand that statements regarding future prospects may
not be realized. Investors should note that income from such securities, if
any, may fluctuate and that each security's price or value may rise or fall.
Accordingly, investors may receive back less than originally invested. Past
performance is not necessarily a guide to future performance.

Neither the information nor any opinion expressed constitutes
an offer to buy or sell any securities or options or futures contracts. Foreign
currency rates of exchange may adversely affect the value, price or income
of any security or related investment mentioned in this report. In addition,
investors in securities such as ADRs, whose values are influenced by the currency
of the underlying security, effectively assume currency risk.

Moreover, from time to time, members of the Institutional
Advisors team may be long or short positions discussed in our publications.